{"id":68704,"date":"2023-10-04T13:41:04","date_gmt":"2023-10-04T17:41:04","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/revenge-travel-is-dead-what-comes-next\/"},"modified":"2023-10-04T13:41:08","modified_gmt":"2023-10-04T17:41:08","slug":"revenge-travel-is-dead-what-comes-next","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=68704","title":{"rendered":"Revenge Travel Is Dead. What Comes Next."},"content":{"rendered":"

Long lines. Crowded attractions. High prices. In a post-Covid world, people were willing to put up with these inconveniences and more, just to be able to explore the world again after a long period of lockdowns. Those days are over.<\/p>\n

\n

Take Kathryn Quigley, who has had her fill of bucket-list trips for now. While visiting Europe with her mother and two children for a long-delayed birthday celebration, the professor of journalism at New Jersey\u2019s Rowan University toured all of the Parisian highlights before coming down with a nasty case of Covid-19, despite her best precautions. The illness left her drained and just hanging on until the end of the vacation. The physical\u2014and financial\u2014toll of the trip means she\u2019s not eager to splash out on another dream destination soon: \u201cAfter that, I told my kids if we do anything this summer, it will just be chill.\u201d<\/p>\n

She\u2019s not the only one. This summer, airfares dropped both month over month and year over year. And while some\u2014particularly wealthier\u2014sightseers are still jet-setting internationally, domestic travel has fallen. Yet people are willing to spend for the right trip. A recent PayPal survey found that nearly three-quarters of Americans are willing to change their daily spending so they can afford travel\u2014forgoing things like alcohol, haircuts, and takeout food\u2014and a quarter are willing to trade down to more budget-friendly locations.<\/p>\n

The takeaway is obvious. Binge travel is out; bliss travel\u2014meaningful, relaxing, frictionless trips for everyone who was run ragged by revenge vacations\u2014is in.<\/p>\n

\u201cTravelers are being very intentional now about planning trips with a specific experience in mind,\u201d says Mike Wagner, industry managing director of consumer brands for
\n Acxiom,<\/span><\/p>\n

Interpublic Group\u2019s<\/span>
\n (ticker: IPG) data solutions division. \u201cWe\u2019re now seeing a much bigger shift toward travelers who want to get to a destination and relax.\u201d\u00a0<\/p>\n

That makes sense. During lockdown, everyone spent time dreaming up their perfect trip, from big bucket-list blowouts to tropical getaways and exotic overseas adventures. So when restrictions were lifted, they were determined to go to all the previously off-limits places they could as quickly as possible, regardless of high costs, inconvenient delays, and huge crowds of other tourists with the same idea. <\/p>\n

Yet that kind of revenge travel has led to plenty of burnout. Now people are looking to make meaningful memories with more intentional itineraries, without the crammed schedules, transit headaches, and overall stress\u2014even when traveling on business. Bliss travel is as convenient, fulfilling, and relaxing as binge travel was frantic and rushed.<\/p>\n

And what could be more relaxing than a cruise? The whole industry took a hit when Covid tore through ships and left them unwelcome at ports, and the Big Three\u2014
\n Carnival
\n (CCL),
\n Norwegian Cruise Line Holdings
\n (NCLH), and
\n Royal Caribbean Group
\n (RCL)\u2014took on big debt to rebuild their fleets.<\/p>\n

Yet several factors are stacked in cruise lines\u2019 favor: Their prices are significantly lower than hotels and other onshore options, new ships are more efficient and attractive to travelers, and they\u2019re popular for multigenerational trips. What\u2019s more, they allow travelers to relax when they want, see the sights whenever they wish, and not have to worry about the planning once they\u2019re on board the ship. That\u2019s led to an explosion in demand, which in turn has bolstered strong operating cash flows that will help them deleverage. Their shares still haven\u2019t regained prepandemic levels, despite notching big runs in the past year.<\/p>\n

Royal Caribbean looks to be the best of the bunch. According to data from
\n SimilarWeb,<\/span>
\n major cruise lines\u2019 websites saw a 26.5% increase in traffic in July, the most recent month available, with Royal among the fastest-growing brands. The stock trades at a modest 11 times forward earnings despite recent blowout beat-and-raise earnings. Consensus calls for the company to finally return to profitability this year after Covid losses, with a 36% jump in earnings in 2024.\u00a0<\/p>\n

Royal Caribbean has \u201ca best-in-class portfolio of brands, destinations, [and] ships,\u201d making it the only one of the Big Three worth owning, according to J.P. Morgan analyst Matthew Boss, who thinks it should trade to $139, up 60% from Tuesday\u2019s close of $86.78.\u00a0<\/p>\n

Landlubbers will need to rest their heads too, and hotels need to be able to offer travelers a place to unwind, not just sleep. That\u2019s true even of business travelers, who are mixing their work and relaxation in a new trend called \u201cbleisure,\u201d made possible by the convergence of prices for both business and leisure stays.
\n Marriott International\u2019s<\/span>
\n (MAR) investor day demonstrated a lot of what hotels are trying to accomplish. The company emphasized \u201cthe importance of a great sleep experience,\u201d while also highlighting brands like Westin and the Design Hotels, which \u201cemphasize lifestyle, wellness, and unique experiences.\u201d<\/p>\n

\u201cWe are leaning into products that help address the demand for blending work and leisure travel,\u201d Julius Robinson, Marriott\u2019s chief sales and marketing officer for the U.S. and Canada, tells Barron\u2019s<\/em>. He notes the company has success attracting this cohort, as evidenced by \u201cshoulder night\u201d bookings on Sundays and Thursdays\u2014before and after work commitments\u2014as well as sleep tourism, which focuses on \u201crejuvenating sleep experiences\u201d for overstressed guests.<\/p>\n

Marriott\u2019s recent investor day was so good it even blew away skeptical analysts. J.P. Morgan\u2019s Joseph Greff said he came away \u201cimpressed\u201d with everything from Marriott\u2019s benefits of scale to room growth, and \u201cits [meaningful] ability to return capital to shareholders.\u201d BMO Capital Markets\u2019 Ari Klein noted that \u201coptimism reigned\u201d at the presentation, which offered a \u201clargely upbeat outlook for global travel, delivering upside across most metrics through 2025.\u201d\u00a0<\/p>\n

Both analysts are sidelined on the stock, and Marriott remains out of favor on the Street, but analysts\u2019 earnings estimates for 2023 and 2024 have been climbing over the past one, three, and six months, according to FactSet, and the consensus now calls for double-digit earnings per share growth this year and next.<\/p>\n

\u201cWe have not seen signs of a lodging demand slowdown [amid] a continued want from consumers to spend on experiences,\u201d says Marriott\u2019s Robinson, who notes guests are interested in personal, in-room pools and bespoke private dining.<\/p>\n

Even large groups, whether business or otherwise, are looking for comfort and convenience when traveling. That has been a boon for
\n Ryman Hospitality Properties
\n (RHP), which owns the Grand Ole Opry and other assets in the tourist magnet of Nashville, as well as the Gaylord Rockies property in Colorado, popular with conventions and leisure travelers alike. Deutsche Bank analyst Chris Woronka believes the Colorado property will be \u201ca key driver of Ryman\u2019s growth profile for years to come.\u201d Truist Securities analyst C. Patrick Scholes named the stock a top pick as well.<\/p>\n

Not only are Ryman\u2019s assets well known, but they also have pricing power, and the company is just starting to benefit from higher room rates that already cycled through much of the industry. Moreover, \u201cthere is a minimal number of large convention hotels,\u201d says Scholes, \u201cso Ryman doesn\u2019t have to worry about new industry supply\u201d driving down room prices.\u00a0<\/p>\n

Yet despite these tailwinds, the shares\u2019 price to funds from operations\u2014a key metric for real estate stocks that accounts for factors like depreciation and dividend payouts\u2014stands at just over 11 times, a fraction of its historical average.\u00a0<\/p>\n

Airlines are the one area that can still separate travelers\u2014and investors\u2014from their bliss. The stocks rebounded quickly in late 2020 and 2021, but the big three\u2014
\n American Airlines Group
\n (AAL),
\n Delta Air Lines
\n (DAL), and
\n United Airlines Holdings
\n (UAL)\u2014are still trading below prepandemic levels. They have fallen on hard times recently, as jet fuel prices have risen and increased capacity has helped to push down fares. While other companies have been seeking to build loyalty, airlines seem to be devaluing it. Recent changes to Delta\u2019s SkyMiles medallion qualifications have made some fliers so angry it has been dubbed Skypocalypse, with conciliatory promises by management met with relative coolness. A Delta spokesperson says the company is constantly listening to customer feedback about potential changes, and noted its CEO recently made a statement to that effect.<\/p>\n

For airlines, the key is to offer more than just points. That could be exclusive experiences or partnerships with other brands across the travel ecosystem: for example, a vacationer getting rewards for both the flight and hotel they booked, without the hassle of chasing down credit for each one separately.<\/p>\n

That\u2019s especially crucial now, as \u201cloyalty has dramatically changed,\u201d says Acxiom\u2019s Wagner. \u201cBefore, brands counted heavily on people being invested in their accumulated status and points; they were complacent. Everything reset during the pandemic and now they have to re-earn that loyalty.\u201d<\/p>\n

Airline stocks have never earned that loyalty from investors\u2014and it isn\u2019t time to start giving it to them now.<\/p>\n

Write to Teresa Rivas at teresa.rivas@barrons.com<\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Long lines. Crowded attractions. High prices. In a post-Covid world, people were willing to put up with these inconveniences and more, just to be able to explore the world again after a long period of lockdowns. Those days are over. Take Kathryn Quigley, who has had her fill of bucket-list trips for now. While visiting […]<\/p>\n","protected":false},"author":1,"featured_media":68705,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-68704","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nRevenge Travel Is Dead. What Comes Next. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Long lines. Crowded attractions. High prices. 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